Thursday, November 29, 2012

Will Obama Clean Up Wall Street?

William Cohan has written an interesting article over at Bloomberg.
Despite the fact that Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C) were among Obama’s top 10 financial backers in 2008, we were hopeful we would see a change in the system whereby bankers, traders and executives were rewarded every day to take huge, asynchronous risks with other people’s money. (Sweep Wall Street Clean)
The key to “cleaning up Wall Street” is to make the risk-reward equation symmetrical

Recent events have shown that Wall Street sees no downside to reckless gambling. They rake it in when they win, and We The People pay when they shoot craps. That needs to change. Making the top management of all companies personally liable for losses would be a great first step. You want to see the community police itself? The specter of having to hock the Ferrari and sell the homes in The Hamptons and in Aspen tends to focus one’s mind, as does the prospect of going to jail for financial malfeasance.

We used to hold the bankers responsible in America. It’s why they were jumping out of windows during the crash of 1929.  

That is my recommendation. Here are Cohan’s:

Erskine Bowles for Treasury Chief
For Treasury secretary, the best choice is Erskine Bowles, who has distinguished himself as co-chairman of the National Commission on Fiscal Responsibility and Reform. Although it is true that Bowles was chief of staff to President Bill Clinton, and thus rubbed elbows with Rubin and Altman, he isn’t in that Rubin orbit. He understands Wall Street -- he founded a small eponymous investment bank and a private-equity firm, Carousel Capital, and was a partner at private-equity giant Forstmann Little & Co. -- and did a fine job serving as president of the sprawling University of North Carolina system.
More important, he has spent the past year shaping his commission’s report -- despite Obama’s having ignored it -- into legislation that Congress can take up immediately to try to resolve the budget deficit and the looming fiscal cliff, the more than $600 billion in tax increases and spending cuts scheduled for next year. He has a proven record of bipartisanship, working well with Alan Simpson and the other Republicans on the commission. Appointing Bowles to Treasury would show that Obama is serious about getting the country’s fiscal house in order and finding a more productive relationship with Wall Street. (Sweep Wall Street Clean)
Eliot Spitzer for SEC Chairman
To address the vacuum of accountability on Wall Street, Obama should appoint former New York Governor Eliot Spitzer as the new chairman of the SEC. I’m not joking.. Having prosecuted Wall Street misdeeds as New York attorney general a decade ago, he knows where the bodies are buried and won’t be afraid to dig them up. As a cable-television host, he has proved to be the news media’s most aggressive and informed critic of Wall Street. (Sweep Wall Street Clean)
I agree with him. If Obama is serious about cleaning up Wall Street, he’ll appoint these two men.


Bunkerville said...

From what I have read, Spitzer was far from a white knight, and went far afield in prosecutions. Might want to check it out.

Silverfiddle said...

I know he was no white knight. He was a grandstander.

If government is serious about regulating Wall Street, it needs someone like him. What we've got ain't workin'

Anonymous said...

I honestly don't think fixing the Wall Stree bankers has to be all that hard if this administration is serious about doing it. We don't need another 2000 plus page law that reguie¡res different agencies to create hundreds or thousands of regulations to implement the law. The secret, ibe lieve, is to once again separte investment risk taking from banking services. A law of of no more than ten pages ough to do it. I am a fan of Professor Kotlikoff's ideas that would get banks entirely out of the risk business and, therefore there would never be another bank failure and a need to bail them out as has happened so many times in Americ's history. Banks would only provide services for a fee and would not make loas of any kind. The banks would provide an intermidary service for individuals and businesses to fill their needs for loans. The banls would do the leg work of investigating the the credit worthiness of their clients seeking loans and then would bundel then and present them to money market funds- If the money market finds want to make the loans throgh the banks, they give the banks the money to loan to their clients and then the monarket fund managers then sell the loans to their investors with the proper risk-reward analysis. If loans go bad the investors and the fund managers pay the price. The banks make their dees for service and the borrowers are on the hook to the money market funds.

Ducky's here said...

If Obama is serious about cleaning up Wall Street

Ducky's here said...

Maybe he'll nominate conservative darling, Pete Peterson.

Pay up. It's the Full Ayn Rand for you.

Silverfiddle said...

"Maybe he'll nominate conservative darling, Pete Peterson."

Peterson's too smart for this Klown Kar administration.

Grung_e_Gene said...

Elliot Spitzer would be a fantastic choice to take on Wall Street, which is why the Plutocracy sought to destroy him.

And remember what they "got" him on, SEX! Dirty, dirty Sexy Sex! Because if there's a way to take down any politician it by SEX!

But, Wall Street runs Washington, both the wholly owned Republicans and the "Pro-Business" Democrats.

But, that is what the Modern Right supports, Corporate Hegemony.

Silverfiddle said...

Well Gene, it was sex with a prostitute, which is illegal.

But I'm glad you get the point. It takes a bastard to catch other bastards.

Fredd said...

Obama? Clean up Wall Street? This guy couldn't clean up a spilled glass of milk, even with Mr. Clean standing beside him giving instructions.

(instructions which Barry would ignore, since he doesn't listen to anybody, except Michelle who threatens to beat him up if he doesn't)

Bunkerville said...

He wants to shut down newscorp for one, and his treatnment of Hank Greenberg over at AIG appeared to be personal.

Silverfiddle said...

I believe you Bunker. I am not a fan, but I found the article intriguing.

FreeThinke said...

"Recent events have shown that Wall Street sees no downside to reckless gambling. They rake it in when they win, and We The People pay when they shoot craps."

You said it all right there.

It is the unholy PARTNERSHIP between Big Government and Big Business that needs to be dissolved -- and FAST.

Bilking the American public to "cover" THEIR reckless, feckless, foul-smelling, self-indulgent butts is about as rotten as it could get.

But I'll say it again: It's The OLIGARCHS -- the INTERNATIONALISTS -- that need to be hunted down, strung up, flayed alive, then sprayed with machine gun fire -- or at least the metaphorical equivalent thereof.

JAIL -- even a life sentence -- is too good for them.
but who could make them accountable. THEY have all the money, all the power and all the resources at THEIR disposal. Without THEM we ain't got squat.

Morons still like to think things were bad in the days of the so-called Robber Barons. HAH!

THOSE guys did a lot of lasting good for society.

What have the New [Socialist] World Order given us but a load of crap bigger than all the great Pyramids combined.

Democrats may be deluded, Republicans incredibly dense, but the OLIGARCHS are truly EVIL.

And THAT should be a lot easier to prove than the existence of God.

~ FreeThinke

Finntann said...

@Making the top management of all companies personally liable for losses would be a great first step.

I'm thinking you pay them 30% of their salary up front, the other 70% is used to buy company stock (bi-weekly or monthly) which is put in escrow until they leave the company. They have a significant personal investment in the company and if the price goes up, they win, price goes down, they lose.

Finntann said...

@But, that is what the Modern Right supports, Corporate Hegemony

Yeah Gene, you figured us out.

(rolls eyes)

FreeThinke said...

While we're at it, how about making surgeons financially responsible for all their patients who die under the knife -- or who survive but fail to regain a reasonable measure of good health?

Shouldn't the fees paid to these butchers be at least partially refundable?

People MUST be held responsible for their mistakes no matter WHAT they do.

~ FT

Ducky's here said...


Les Carpenter said...

@ Ducky... Really? Yours been adjusted recently?

Ducky's here said...

Yeah, when I need relief I put on King Vidor's film of The Fountainhead.

Fantastic satire made all the tastier for his having done it with that moron Rand on the set demanding script and artistic control.

Better reminder than The Crowd of what a fantastic director he was.

Too bad he wasn't around to do Atlas Shrugged.

FreeThinke said...

Hey, Canardo!

Say something nice about someone -- besides intellectual termites like Howard Zinn, William Rivers of Spit, and Sunshine Susie Sontag, and makers of japanese films no one in his right mind would want to watch -- and I promise I'll send you a leather-bound, autographed copy of The Purpose Driven Life along with a signed 8 x 10 glossy of Pastor Rick Warren, himself.


Go on -- I double dog dare ya!

~ FT

Ducky's here said...

" ... and makers of japanese films no one in his right mind would want to watch."
Before you make such a ridiculous claim you need a grounding in the basics.

Here are ten films to give you a foundation.

Kuroasowa -- Ikiru

Naruse -- Floating Clouds

Mizoguchi -- Sansho the Bailiff

Ozu -- Tokyo Story

Kobayashi -- The Human Condition

Yamanaka -- Humanity and Paper Balloons

Shimizu -- Japanese Girls at the Harbor

Teshigahara -- Woman in the Dunes

Ichikawa -- The Burmese Harp

Kitano -- Hana-bi

A working knowledge of Japanese cinema is part of basic literacy. You wouldn't want to try to carry on a conversation with someone who hadn't listened to the Beethoven quartets. Same deal.

Silverfiddle said...

@ FreeThinke "Intellectual termites"

I love it!

And notice Mr Perpetual Dyspepsia couldn't take you up on your offer to say something nice.

Taking a crowbar and going smashy-smashy is so much easier, and so much more fun!

Ducky's here said...

And notice Mr Perpetual Dyspepsia couldn't take you up on your offer to say something nice.

Certainly not after the irony of him insulting Japanese cinema.

Ducky's here said...
This comment has been removed by the author.
Ducky's here said...

So give me an indicator of what I should find admirable in contemporary conservative thought, Silver?

People wh throw around the term Marxist and socialist without understanding?

Glenn Beck or people who take that idiot seriously?

Religious bigots?

Just what is admirable? Homophobes?

Supposed Christians whose spirituality is confined to trying to control people's sexuality and pimping for Likud?

People who get a woodie just thinking about Atlas Shrugged?

Michele Bachmann, Newt Gingrich, Rick Perry, Rick Santorum, Rick Perry.

Allen West? Let's count his achievements as the face of the new right.

Let me know.

Okay here's one. Kevin Phillips.
A man who has seen the error of the Southern Strategy and tried to right the conservative ship.
Frankly an honesty that is rare on both sides

Silverfiddle said...

"Certainly not after the irony of him insulting Japanese cinema."

Boo Hoo.

And what was ironic about it?

Silverfiddle said...

Ducky: Funny you should whine about people throwing around the terms marxist and socialist when you yourself focus on extreme elements or mischaracterize people on the right.

Kevin Phillips? I guess to a marxist he would appear conservative.

And I don't expect you to find anything admirable in modern conservative thought. You're a leftist!

Ducky's here said...

Kevin Phillips? I guess to a marxist he would appear conservative.


Ducky's here said...

"Certainly not after the irony of him insulting Japanese cinema."

Boo Hoo.

And what was ironic about it?

The fact that he trades only in insult.

A secondary point is that like most of the fringe right he doesn't get out much and as a result has a very limited world view.

Silverfiddle said...

"The fact that he trades only in insult."

Yeah... Nobody else around here does that...

Silverfiddle said...

Re: The QED. Yes, to someone on the extreme fringe left, a squishy moderate would look positively right wing. Glad you get it.

jez said...

The irony must be obvious, but we can spell it out. FreeThinke's negativity & rudeness is not in itself remarkable compared to internet norms; it only becomes unusual when he complains so much about the culture of insult while continuing to enthusiastically contribute his own extravagant invective. Hypocrites usually have more shame than this.